Murdoch’s Fox raises bid for Sky to $32.5 billion

  • Murdoch’s Fox raises bid for Sky to $32.5 billion

Murdoch’s Fox raises bid for Sky to $32.5 billion

Disney's bid to buy out the majority of Fox's entertainment assets was the talk of the town previous year, until the two companies hit a roadblock - an anti-competitive complaint by the Department of Justice.

Britain's former Culture Secretary Matt Hancock, who was replaced on Monday night with Jeremy Wright in a cabinet shakeup, had said he was willing to let the takeover go ahead, provided Fox sold Sky's 24-hour news channel to Disney.

Sky shares traded at 14.85 pounds as of 8:14 a.m.in London.

Disney now has a $71.3 billion deal in place with Fox to acquire the company's film production businesses, including Twentieth Century Fox, Fox Searchlight Pictures and Fox 2000 Pictures; Fox's television creative units Twentieth Century Fox Television, FX Productions and Fox21; FX Networks; National Geographic Partners; Fox Networks Group International; Star India; and Fox's interests in Hulu, Sky plc and Tata Sky.

The Department of Justice highlighted that Disney already owned a good chunk of the sports entertainment industry with ESPN, claiming that Fox's added assets would result in anti-competitive domination of the field.

"Disney's internal forecasts now, on the basis of the cash flows they've published for Sky, would value it at 16 pounds", he said.

Rupert Murdoch's Fox has been waiting for approval from United Kingdom regulators before putting the deal to shareholders.

The agreed price represents an 82 percent premium to Sky's shares in December 2016, before it struck its original deal to buy Sky, and a multiple of 21 times 2017 earnings per share.

"Fox coming back in for Sky isn't a surprise in itself, but the fact the offer is slightly behind what some had anticipated brings another twist", said George Salmon, equity analyst at Hargreaves Lansdown. The current bid by Fox has been stalled for months as first Britain's media regulator and then its competition watchdog reviewed the politically sensitive matter, examining whether Fox's ownership of Sky would concentrate too much power in Murdoch's hands and whether the Murdoch family would be "fit and proper" owners. News Corp., which is controlled by the Murdochs, withdrew its bid for Sky soon after.